Serengeti Resources Inc. announces that Daewoo Minerals Canada Corporation ("DMC"), a Canadian subsidiary of POSCO Daewoo Corp., one of South Korea's leading trading corporations, has exercised its right to earn an additional 30% interest, bringing their total interest to 35% in the Kwanika Copper Gold project, subject to finalizing and executing the full Joint Venture Agreement for the project.
Serengeti President & CEO David W. Moore stated, "POSCO Daewoo's commitment provides financial stability and I believe significant value to both the Kwanika project and Serengeti as a Company. Today's announcement provides a clear path forward that will begin with the initiation of a Pre-feasibility in the short term. We look forward to working with a global partner of POSCO Daewoo's caliber having both financial and trading capabilities which will be very advantageous to our shareholders as both companies advance the Kwanika project towards our ultimate goal of putting the project into production".
Kwanika Project Advancement Plan
Over the next 60 days the partners will establish a joint venture company, finalize the full joint venture agreement, DMC will contribute their current 5% interest plus $7 million in cash and Serengeti will contribute an additional 30% Kwanika property interest to the new joint venture company. The partners are currently finalizing a plan and budget to advance the project through completion of a Pre-feasibility Study (PFS) including funding a significant drilling program beginning in late September and initiating other activities consistent with PFS level studies. Serengeti will remain as project operator and will be entitled to charge a 10% operator's fee on expenditures, so long as it maintains a majority interest. Additional terms of the Kwanika joint venture can be found in Serengeti's Consolidated Financial Statements for the year ended February 28, 2017 and in NR-2016-02 dated March 7th, 2016, both of which are filed on SEDAR.
An independent NI 43-101 Preliminary Economic Assessment ("PEA") for the Kwanika copper-gold porphyry project located in the Quesnel Trough of North-Central British Columbia, Canada was completed in April 2017. The results of the PEA demonstrated the potential technical and economic viability of establishing a new copper-gold mine and mill complex on the property (see NR 2017-04, dated April 3rd, 2017 for full details).
- Pre-tax and post tax respectively NPV7% of CDN $324 and $191.2 million, 21.1% and 16.6% IRR, over a 15-year mine life.
- Life of mine (LOM) metal production of 601 million pounds copper, 676,300 ounces gold, and 2.66 million ounces silver in concentrates.
- Annual metal production of 50.4 million pounds of copper, 70,100 ounces of gold, and 181,100 ounces of silver in concentrates for the first eight years.
- Initial capital cost of CDN $476 million plus LOM sustaining capital and closure cost of $83 million for a 15,000 tpd (5.4 million tpa) mill and combined open pit, underground mining operation.
National Instrument 43-101 Disclosure.
The Kwanika PEA was prepared by Moose Mountain Technical Services (MMTS) under the direction of Jim Gray, P.Eng., a Qualified Person (as defined under National Instrument 43-101) who is independent of Serengeti and has reviewed and approved this news release. Marek Nowak, P. Eng. and Chad Yuhasz, P. Geo. of SRK Consulting (Canada) completed the NI 43-101 resource assessment report included in this PEA and are Qualified Persons and independent of Serengeti.
David W. Moore, P.Geo., Serengeti Resources Inc. President & CEO is the Company's designated QP for this news release and has reviewed and validated that the information contained in the release is consistent with that provided by the QP's responsible for the PEA.